As bitcoin moves into 5 digits and Ethereum is closer and closer to half a thousand dollars, the old world is lagging behind, amid bubble claims and naysayers floating in the Twitterverse. In the meantime, ICOs, i.e. Ethereum-based token crowd sales, are making VC rounds pale in comparison. But while every holder is fighting for your attention like a mattress salesman, institutions all over the world are still trying to figure it out and come up with a legislation for ICOs and, broadly speaking, cryptoassets. There is much debate around the opportunity for money laundering and terrorism financing, but at the same time it’s clear that data silos owned by godlike private corporations are the anteroom for dystopia, and not a day goes by that distributed ledgers will not become the cornerstone of the new internet.
That said, nowadays there are more raised eyebrows than open arms for cryptoassets, especially given the tenfold increase of bitcoin during 2017 and the staggering run of ethereum and altcoins in general. Ultimately, it seems clear that three major blocks are going to shape the future world: a first group, made of a few visionary countries such as Estonia, Japan, and United Arab Emirates legalizing, supporting, even endorsing cryptocurrencies, and a second one, including but not limited to Vietnam, Bolivia and recently China, which prohibits them altogether. Finally, there are the indecisive countries who’d rather straddle both worlds. This is the case of South Korea, that banned ICOs just two months ago and now is embracing blockchain like Santa Claus come early.
At least, that’s what a normal person would say reading that the South Korean government is signing a deal with Samsung SDS, an IT subsidiary of Samsung Electronics, to reportedly “apply blockchain technology to its administrative work across the city’s welfare, public safety and transportation affairs by 2022 to improve transparency operations and increase convenience for citizens”. That’s it: Samsung SDS won an order from Seoul’s Metropolitan Government to establish an Information Strategy Plan (ISP) for ‘Innovation in Building Blockchain (Solutions) for Seoul City’
We can’t help but wonder: as far as blockchain is concerned, is this a U-turn for South Korea? Should we expect it to take it all back, as far as ICOs and cryptocurrencies are concerned?
We are left with speculative answers to such important questions. Hong Won-Pyo, CEO of Samsung SDS, commented: “Samsung SDS’ Blockchain technology and consulting capabilities will contribute to Seoul’s leap as a top-rate global city.”
Rethinking the public infrastructure with blockchain technology
South Korea is not alone looking at the blockchain as an essential tool to refound the public sector. Estonia in this regard is by far the digital leader of our planet: investing in e-society since the 90s, it has moved its entire infrastructure to blockchain and now is the only one country with a tamper-proof, scalable, 21th-century infrastructure on Earth. But not everyone likes to “move fast and break things”. Also, it’s worth remembering that Estonia is a 3-million country that was practically re-engineered after the wall came down: no wonder it behaves like a startup.
South Korea instead favors a more cautious approach, and after a spike of trading activities it didn’t think twice about banning ICOs. “Raising funds through ICOs seem to be on the rise globally” declared the regulator “and our assessment is that ICOs are increasing in South Korea as well. Stern penalties will be issued on financial institutions and any parties involved in issuing of ICOs.” Although, this is far from meaning that blockchain is not a technology to look at.
Rather, South Korea seems to follow the old adage, according to which bitcoin is the bad guy and the blockchain the good one. That’s why the government can sign a deal with Samsung SDS Nexledger for kickstarting the Korean Inter-Bank system and at the same time not even consider cryptocurrencies in the same way as real currencies, financial instruments or anything else that should deserves regulation.
This is not the first move of Samsung in the blockchain realm. In May they launched Nexledger and run a successful pilot program, together with South Korea, to power the shipping industry of the country.
Samsung is not alone in this space. There also is Microsoft, with Coco and Ethereum Blockchain as a Service. Google is probably the second highest investor in the field. Not to mention banks: Citigroup, Goldman Sachs and even JPMorgan Chase, despite Jamie Dimon’s claim that bitcoin investors are stupid, are financing or tinkering with the next wave of innovation. And of course, I’m not even considering the tons of ICOs that keep rolling in day after day, nor consortiums like the Ethereum Alliance and Ripple’s Blockchain Network – otherwise we would be talking for hours.
Basically, nobody knows anything, but there’s a strong feeling about distributed ledgers covering a fundamental role in our society in the future.
According to McKinsey, blockchain “it’s not just for financial institutions; government agencies can use this digital ledger technology to protect trusted records and simplify interactions with citizens.”
